The UK lettings market has seen unprecedented growth over the last ten years. We caught up with Claudia Green to get an overview.
The UK lettings market has seen unprecedented growth over the last ten years. Indeed, UK rents have doubled on average over the last decade and, in 2017, a record £50 billion was paid in rent by UK tenants. We now have twice the number of tenants compared to twenty years ago and there are many factors influencing this. We caught up with Claudia Green, Head of Lettings at Winkworth to get an overview.
How has the lettings landscape at Winkworth changed over the last ten years?
Winkworth has doubled the number of offices across the country over the last ten years. We now have over ninety-five offices, with the lettings side of the business having grown at around 7% year-on-year since then. The vast majority of our offices now offer lettings as part of their services whereas ten years ago it was only really London who did. Winkworth’s business is now split almost 50/50 between sales and lettings, and it has been this way for a couple of years.
What have been the major factors contributing to Winkworth’s lettings growth?
Where to begin! Generally, more people are renting because they can’t afford to buy as early as they would like to, even with Help to Buy schemes. However, ‘Generation Rent’ don't necessarily want to buy and like the idea of not having to be tied to one place forever. The way we live and more importantly work has changed so much in recent years, especially in big cities. Moving locations for your job is much more commonplace and people want the flexibility of living somewhere for a few years and then moving on somewhere else without the expense and stress of buying and selling. People want ease and convenience and, as such, choose to rent over buying as the process is more flexible. The introduction of companies like Tipi make the rental experience even easier, enticing more people to rent in a tenant-friendly environment.
Is the market seasonal or consistently busy?
We still see seasonality with the usual rush in the summer, but we are also seeing behaviours change slightly, with February and March getting busier than they ever used to be.
Has the length of time the average property is on the market for changed?
This obviously depends on the areas you are in, but, in general, properties are still being snapped up quickly if they are priced correctly. There is a real shortage of lettings stock across the board at the moment, so one and two bedroom flats are still being let within a couple of weeks. In some areas, properties barely make it to market before being let. We’ve also seen an increase in the length of the average tenancy over the last decade, which is now usually around eighteen months. Tenants want to 'lock in' the price of their rent for as long as possible.
What have been the major changes to legislation over the last ten years?
So many, but our teams will keep you up to date and guide you through the process. Selective and additional licencing, Houses of Multiple Occupancy, Anti-Money Laundering legislation, Client Money Protection schemes and the Tenant Fee Ban (due next year) have all affected the UK lettings market hugely. In addition, Stamp Duty Land Tax changes and mortgage tax relief changes for landlords have all influenced the market. As all rental income is now taxed, some smaller portfolio landlords are looking to sell properties as they don’t feel it’s a profitable business for them anymore. This has created a shortage of property, particularly in London. Brexit has, of course, impacted the market and the fee ban will also affect the market next year - as people are waiting to move until the ban comes in, therefore making it cheaper for them to do so.
If you’re thinking of renting or letting, or simply would like some advice on the current climate, contact your local Winkworth office.